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January 2018 Trade Bulletin

· Bilateral trade: The U.S. trade deficit in goods with China totaled $35.4 billion in November 2017, its highest monthly level in the past two years and a 16.2 percent increase year-on-year.

· Bilateral policy issues: President Trump issues National Security Strategy calling for more assertive policies to combat Chinese influence campaigns and economic coercion; the U.S. government is pursuing multilateral and bilateral approaches to confront China’s market-distorting support for sectors such as steel and aluminum.

· Policy trends in China’s economy: At the Central Economic Work Conference, Chinese leaders maintain last year’s focus on financial risks and supply-side structural reform but place less emphasis on deleveraging; IMF cites China’s credit growth, regulation, and implicit credit guarantees from banks and government actors as top concerns in its most recent financial system stability report.

· Sector focus – Consumer Goods: U.S. consumer goods exports to China experience consistent growth from 2003 to 2016 despite accounting for a small portion of U.S. exports to China; on December 1, the Chinese government cut tariffs on several products, including top U.S. consumer good exports.

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The U.S.-China Economic and Security Review Commission was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.